India set to halt Iran oil imports

p2prada

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Their economy is down, they don't have any influence, and we can get better and more secure sources than Iran.
That's the problem. I don't think we can get a better source than Iran.

China is a larger importer than India is. So, how are they managing their insurance issues?
 

Singh

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That's the problem. I don't think we can get a better source than Iran.

China is a larger importer than India is. So, how are they managing their insurance issues?
Why can't we get a better source ? Iran is a very troublesome source. And ever since we shut down refining their oil, they have been acting like a petulant lil child.

I have no idea how China is managing their insurance, probably their state owned companies can absorb losses

Why we are stalling ?
1. our companies operate in a different manner and nobody wants to lose their job over insurance issues as it is our our cos are already making huge losses.
2. We want a way out from Iran, and we have got a loophole
3. We are trying to put pressure on Iran, look no insurance, so you reduce rates to offset risks.
 

hit&run

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I saw it coming when they assured Pakistan with refinery at Gwadar and loan for IP pipeline.

Having said that, I think it's still too difficult to read the happenings accurately.
 

Armand2REP

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Euro sanctions finally forced Indian refineries to bail on Iran. How does India replace that source of crude? Libya? :laugh:
 

desicanuk

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Nor Iran decides it solely based on religion.
I would like to think ignorance is bliss!!But to state that a theocracy like Iran does not have a religious angle on foreign policy decision is bunkum!!
Do you really believe that the Ayatollah is only a sort of figurehead with no power?
 

p2prada

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Why can't we get a better source ? Iran is a very troublesome source. And ever since we shut down refining their oil, they have been acting like a petulant lil child.
I am not so sure we can simply dump decades long supplier, supplying over $12 Billion worth of oil every year, overnight.

Iran caters to 12% of our oil needs and we took a year to reduce it to around 9%. I have no idea who on earth would provide us $12 Billion worth of oil so quickly. Most countries we have deals with will be able to deliver a bit more than what we have contracted for, but that won't go into billions.

We may end up losing more money switching suppliers and we may end up paying much more than current international rates.

I have no idea how China is managing their insurance, probably their state owned companies can absorb losses.
Would be nice if someone is able to point out how it works there.
@badguy2000

2. We want a way out from Iran, and we have got a loophole
Are you sure we want a way out?

We may not necessarily like their political motives, but we don't necessarily have direct interest in that as a country. Iran's foreign policy is not centered around us being the enemy either.
 
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The Messiah

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Oil will be continued to be bought by govt, private companies are free to do what they want.
 

p2prada

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Oil will be continued to be bought by govt, private companies are free to do what they want.
MRPL is part of ONGC.

It is the state owned firms which will back out first.

Private firms will find alternatives much faster (not oil sources but insurance sources).
 

Singh

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I am not so sure we can simply dump decades long supplier, supplying over $12 Billion worth of oil every year, overnight.

Iran caters to 12% of our oil needs and we took a year to reduce it to around 9%. I have no idea who on earth would provide us $12 Billion worth of oil so quickly. Most countries we have deals with will be able to deliver a bit more than what we have contracted for, but that won't go into billions.

We may end up losing more money switching suppliers and we may end up paying much more than current international rates.
We won't end up paying more than international rates. Saudis (via pressure from Americans ?) have already said that they are willing to supply India.

I haven't followed the Gas industry in some months, but I can give you a brief to search. Ever since we signed nuclear deal, we are shunning Iran and setting up relations with GCC. Qatar is giving us Gas, and Saudis are now are biggest oil exporter. Both these relationships have been built under UPA 1 and 2 tenure.

Are you sure we want a way out?

We may not necessarily like their political motives, but we don't necessarily have direct interest in that as a country. Iran's foreign policy is not centered around us being the enemy either.
Dealing with Iran doesn't make sense. We tried investing, built infrastructure, proposed pipelines, yet they never favoured us. Now they are desperate, and still not offering us concessions. Do not want. And if we do continue to trade with them, the American allies will shun us, are we prepared to put all our eggs in the Iran basket ? Absolutely not.
 

p2prada

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I am still not convinced the Saudis can offer to replace the entire Iranian produce in a short notice. I guess time will tell the next step we take.

Anyway, what about Iraq? Their oil industry should be open to us if the Americans think it will get us out of Iran.
 

arnabmit

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OT, but can anyone let me know what are the plans for India's own shale deposits?
 

sob

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This problem is a bit complex.
Giant Insurance companies do not have the capital to back up mot of the big claims, so to hedge their bets they take an insurance cover on their issued policies. This is very crucial in case of large high risk hi premium coverages like an Oil refinery, where the claims can run into hundreds of millions of dollars.

For example, assume an insurer sells 1000 policies, each with a $1 million policy limit. Theoretically, the insurer could lose $1 million on each policy – totaling up to $1 billion. It may be better to pass some risk to a reinsurer as this will reduce the ceding company's exposure to risk.

With the current sanction on banking channels any repayment from the Reinsurance companies would not be possible if it involves Iranian crude.

Also for people worried about how we will source our crude, remember that we are a net exporter of finished petroleum products. We import crude much beyond our own national needs. We have excess refinery capacity and that is the reason why Essar, Reliance were looking forward to export Petrol/Diesel to Pakistan which suffers from a serious refinery shortage.
 

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